Network analysis - unlock hidden power (and value)

Things aren’t always what they seem

Enthusiastic and brimming with energy, Jim started his new role at XYZ Ltd. Jim was very well qualified for the senior role, both in terms of having a good track record in similar roles and also academically. However, he was expecting his initial months to prove challenging. Prior to engagement, his small but important department had been unable to gain traction in the wider business. His predecessor, Ray, had lasted only nine months in the job and transferred laterally, frustrated at being unable to make any headway.

Jim learned over a coffee with Ray that the department had very capable, hard-working people. The teams had developed excellent business support solutions. However, despite the organisational chart clearly showing where Jack’s department fitted, it seemed near impossible to get the solutions implemented in various parts of the business. In passing, Ray pointed out that perhaps the department was too new, less than a year old. “The wheels turn slowly around here”, Ray commented, “but after a year or so everyone will be more used to it. And you’ll have a better sense of just who you really need to speak to get things done! Hang in there.” Jim knew he didn’t have a year...

Organisational charts and divisional thinking

When UGM commences a client assignment, we always conduct an analysis to determine specific needs. Typically, the organisational chart is one of the first items offered to us, usually in response to a form of the question, ‘How does your organisation create value?’ The organisational chart clearly enjoys a favoured status, perhaps because it’s one way of making sense of increasingly complex organisations. Interestingly, it also demonstrates the divisional or compartmentalised way in which most people think about organisations.

When we dig a little deeper, we quickly discover that the organisational chart represents only how the people in the business are formally organised and managed. It gives us an idea of who conducts their performance appraisal and which section of the business pays them.

Think about your own organisational chart. Though it may show the chain-of-formal-command, does it reveal how work really gets done? You’ll probably find that it’s also a poor indicator of other vital business dynamics: What combinations of individuals actually generate value? How does knowledge and innovation flow through the organisation? How and where does talent emerge and thrive? Though you might be overlooking them, these are ways in which your people are self-organising. All are critical to creating and delivering value and, ultimately, to your success.

Changing perspective – networks rather than divisions

Organisational charts and divisional mindsets are legacies of the industrial economy. This formal organisational structure is necessary but, on its own, not sufficient for goal realisation in today’s knowledge economy.

Reflect for just a moment again on how value really gets created and realised within your organisation. Think of your own role. It won’t take long to identify that networks of connections are the real drivers of value. How many of these networks has your organisation purposefully designed? How many are formally supported? You’ll probably be challenged, and perhaps concerned, by the number which are informal, incidental, and even accidental.

Networks are vital in the knowledge economy, because it’s largely through connections that knowledge workers create value. Just as raw materials were pivotal in the industrial age, knowledge and connections are crucial ingredients in this new economy. If we think of our how our own knowledge machine, the brain, is organised, it’s the networks of neural connections that make it effective.

In isolation, chunks of knowledge have limited value. But, when connected with other chunks of knowledge, the value of that knowledge can increase exponentially. However, when knowledge is divided and siloed, as in the industrial economy, its value is limited, and maybe even destroyed. How well do you think your organisation does at connecting that wealth of knowledge that it possesses and acquires? How much value is being missed or eroded by inadvertently siloing and constraining of knowledge via divisional (compartmentalised) thinking?

Leveraging the power of networks

Organisational Network Analysis (ONA) is a knowledge economy tool that UGM recommends as an equivalent of the industrial economy organisational chart. It helps us think about and measure networks. Essentially, ONA can map any type of network within your organisation. For example: the flow of value – the real value chain; how resources are dispersed; and how much value any role adds to others. If you’d like to know more about how you might use ONA to generate new value, please drop us an email.

ONA has great potential to unlock value. It’s the tool that Jim, in our case study, could have employed to increase his chances of success. ONA is mostly useful in uncovering network complexity, where larger numbers of people interact. But, you could still trial a basic form of ONA at your next team meeting, and gain some useful insights about your own team network. You’ll find instructions in the side-bar. Your networking will never look back!

Analyse your team network

On an A3/A4 page, draw a large circle and place an evenly spaced dot for each person (a node) around the perimeter.

Draw a line to represent the first communication between different nodes as it happens.

An arrow is usually used to show directionality. Where there is two-way communication, it can be helpful to draw two separate lines (different colours help).

Once you’ve got a first line between nodes, make a mark on the same line each time there is additional communication between those particular nodes.

At the end, tally the marks and get a sense of who communicated with whom, and how frequently.

Did everyone contribute evenly, or were some nodes more represented than others?

Were there any patterns between people? For example, one person always gave ideas, but didn’t seek them from others. In larger teams, you might even identify sub-groups.